Primary
rental stock in the Greater Toronto Area (GTA) saw an uptick of 2.1% or 7,175
units in 2022, “the strongest increase in recent decades,” according to a new Rental
Market Report from the Canada Mortgage and Housing Corporation (CMHC). That
said, rents for those units were, outlandishly, 45.4% higher than the average
rent for all units, leaving calls for better affordability in the rental sector
largely unanswered.
The report
goes on to iterate, “newer units would only be affordable to households in the
higher (fourth and fifth) income quintiles” – those earning $70 K to $130K, and
$130K and over.
Taking new
units out of the equation, the average rent for a two-bedroom (CMHC’s typical
sample size) grew 6.5% year over year to $1,765 in 2022. Average condo rent
topped that, at $2,671, as rental demand surged.
“While rental
supply increased, it couldn’t offset the growth in demand,” writers CMHC. “Moreover,
access to affordable supply remains a challenge for law and middle income
renter households. For instance, units affordable to these households had the
lowest vacancy rates in the GTA.”
According to
data tables from the national housing agency, household incomes of $25K or less
faced an average vacancy that was “too low to report.” Meanwhile, households in
the $25K to 48K income quintile faced vacancy of 1.8%, and households earning
between $48K and $70K faced vacancy of 3.7%.
As incomes
increased, so did vacancy.
For households
earning between $70K and $130K, and those earning $130K and over, average
vacancy rose to $7.4% and 8%, respectively.
A High Price
to pay for Turnover Units
While
Toronto and its census subdivision saw strong YoY rent appreciation across the
board in 2022, units that turned over saw 4.5 times that, at 29%, compared to
the overall annual rent growth rate of 6.5%.
“Rent
increases for most units that didn’t turn over were limited to the provincial
increase guideline,” notes the report, which was 1.2% in 2022.
Dana
Senagama, CMHC’s Principal Market Analyst for the Greater Toronto Area and Ontario,
tells STOREYS that this is the first time the agency is considering turnover
unit data in its report.
“Every year,
we get feedback from the industry and stakeholders in terms of what the
important indicators are. This is such an instance where turnover is a key
indicator, and we wanted to include that in the survey,” she says.
Senagama adds
that with rent appreciation for turnovers being as elevated as it is, rental
units in the GTA are being occupied for longer than they ordinarily would.
A lot of the
folks are just staying put because it’s harder to rent again. If you try to
rent, you’re going to have to pay that much more at turnover,” she continues. “As
that just tells you just the kind of pressure we are under.”
Written
By: Zakiya Kassam
Source By:
STOREYS